Cholesterol granuloma is a histological term used to describe the foreign body reaction towards cholesterol crystals causing granuloma. We report a case of cholesterol granuloma in a patient who presented with a mass in her ear after 6 years of mastoidectomy. The diagnosis has been confirmed by MRI and postoperative findings. The difference between cholesterol granuloma and the other entities especially cholesteatoma and meningoencephalic herniation must be made in view of its implications and surgical management of each lesion.